In support of "greed'' - PeachParts Mercedes-Benz Forum

mikemover · #1 12-18-2003, 10:04 AM

Greed Makes the World Go 'Round

Thursday, December 18, 2003
By Radley Balko
___________________________________

"Most of the harm in the world is done by good people, and not by accident, lapse or omission." -- Isabel Paterson, "The God of the Machine"

Now that we’re in the thick of the holiday season, we’re again being warned to be wary of the commercialization, corporatism and greed that comes with Christmas. In last week’s issue of Newsweek, columnist Anna Quindlen (search) lamented the holiday buying spree. The anti-corporate activists at Adbusters attempted a failed campaign this year to keep Americans home from the stores on the Friday after Thanksgiving, often called “Black Friday,” (search) because it’s the first day of the calendar year many retailers begin to make money.

The quote above from Paterson, a passionate writer on freedom and liberty from the 1940s, is an indictment of humanitarianism, or more generally, the nagging need some people have to act “in the best interests” of others, be it through welfare programs, nanny-state legislation, excessive government regulation -- even charity and philanthropy. The corollary to Paterson’s quote, which she delves into in some detail later in her book, is that most of the good in the world has been done by greedy people -- people out to better themselves.

Perhaps there’s some truth to the axiom that was hammered home to us as kids each time the holidays rolled around -- “’tis better to give than to receive.” But if we’re talking about bettering the human condition, it’s better to want than either to give or to receive.

Want and greed are why humanity today is freer, healthier and more comfortable than it’s ever been. Nearly every significant innovation, invention or improvement that man has so far come up with resulted from the innovator, the inventor or the improver’s desire to better his own condition, or, put differently, to get more stuff. It is greed and the want of stuff that drives us to work longer hours, to build better mousetraps, and to take the kinds of risks that shake up the marketplace, and move the whole system forward.

Today, biotech firms are figuring out ways to feed the world’s hungry by producing more food on less land with less water, less nutrients and less need for pesticides. If governments would get out of the way, they’ll probably succeed. But they won’t succeed because they’re good people selflessly working for free to eradicate world hunger; they’ll succeed because the scientists doing the research want the peer recognition, the place in history, and the acclaim and financial rewards that come with figuring out how to do something we already do better. They’ll succeed because the CEOs of those firms want the bonuses, clout, and approval of boards of directors that come with a company’s success.

And they’ll do it because the shareholders have invested money in those companies on the expectation of the windfall that might come to the first company that, for example, can figure out how to genetically insert a typhoid vaccine (search) into a sorghum plant.

This is all motivated by greed. But if the result is muscular crops that lead to fewer hungry people in the world, does it really matter if the motivator that led to those crops was greed or benevolence?

Let me give you a real world example. Last year, it was revealed through divorce proceedings that former General Electric CEO Jack Welch (search) was recipient of all sorts of lavish perks that even thee most ardent capitalist would have to concede were a little ridiculous. The revelation only confirmed the biases of those already critical of Welch, who began his tenure at GE by laying off close to 100,000 people, and whose management style put, to borrow a phrase, “profits over people.” Welch has never been accused of fraud or deceit -- he’s no Ken Lay. But rather, Welch for some has come to epitomize the excesses of capitalism, profiteering and greed.

On the far-other end of the spectrum is Aaron Feuerstein (search). Feuerstein was CEO of the Malden Mills company, a clothing outfitter in Massachusetts. In 1995, three of Malden Mills’ main factories burned to the ground. Feuerstein vowed not only to rebuild those factories, he vowed to rebuild them in a manner that was more worker-friendly and more environmentally friendly than the previous plants, no matter the cost. Feuerstein also vowed to continue to pay his 3,000 workers at full salary until those plants were rebuilt.

Feuerstein was beatified by media and politicians everywhere for his good deed. He got a seat at Bill Clinton’s State of the Union address. He was awarded honorary degrees from universities across the country. He was flatteringly profiled on 60 Minutes.

In November of 2001, Malden Mills declared bankruptcy. Feuerstein’s vow to rebuild the company’s factories on borrowed money while continuing to pay every employee ran Malden Mills into the ground. His benevolence nearly cost 3,000 people their livelihood. Instead of short-term hardship endured while the factories were rebuilt, those people nearly lost their jobs completely.

I say “nearly” because there’s a somewhat happy ending to the story. Malden Mills was saved, thanks in part to a last-minute investment by an outfit called GE Capital. GE Capital is of course owned by General Electric, a company that under the “ruthless” leadership of Jack Welch grew from a maker of refrigerators into the kind of multinational behemoth that can spin off venture capital subsidiaries, which can then invest in struggling companies like Malden Mills.

I’m sure the 100,000 or so people Jack Welch laid off to streamline GE in the early 1980s still don’t think much of him. But his leadership eventually replaced those jobs several times over.

And the 1,200 people who work at Malden Mills today owe their jobs not to Aaron Feuerstein's kindness but to Jack Welch's greed.

_____________________________
Radley Balko is a freelance writer and publisher of the weblog: TheAgitator.com. He's also the author of the new Cato Institute paper, "Back Door to Prohibition: The New War on Social Drinking."

AustinsCE · #2 12-18-2003, 10:18 AM

Makes sense, if everyone helped themselves, nobody would need help from others.

Lebenz · #3 12-18-2003, 10:38 AM

The US government played a HUGE role in the development of agriculture. Look into some of the books by Jeremy Rifkin. Also, the majority of the State University system was founded to help develop agriculture.

///alpinepower · #4 12-18-2003, 10:53 AM

Why don't you check up on Aaron Feuerstein and see how his story really ended.

tabasco85331 · #5 12-18-2003, 11:42 AM

Sounds like you're confusing,"capitalism" for "greed". The ability to develop ones ideas into a successful business venture and then make money are key principles to Americas freedoms. Capitalism "works"! People are rewarded for their success, but not at no expence. It is a VERY risky venture to start a business, with many people and companies failing many times sometimes. People look at successful companies with chagrin, thinking that these people have not paid their dues, but have not seen all of the failed attempts and money spent.

need2speed · #6 12-18-2003, 12:16 PM

John Kenneth Galbraith has been a Harvard professor of economics for 50 years. He served the US Administration since WWII and, at age 95, is still a leading voice of American liberalism. He was recently quoted in the Sept/Oct 2003 issue of the Ivey Business Journal:

(discussing his term, "corporate capitalism")....This is a manifestation of the new structure of the corporate world, which puts power in the hands of the management, not the stockholders and not the public at large, but those who put together and run the great corporate bureaucracies. That endows the people so empowered with the right to pay themselves. And not surprisingly, they have seized upon that right. This is corporate capitalism. It's in all the major industries....and the bureaucratic structure that serves that end, a freedom from legal supervision, from the fact that many of its best people move on to government....
....The dominant thing in these last years is the depth of commitment to damaging economic policy. And given recession, the basic policy of the corporate elite is to do what makes it worse. The surest flow of expenditure to sustain the economy is that of the middle-class and below. When it (the middle-class) has money, it spends. There is no similar assurance on more income for the affluent - that may be saved or squirreled away - there's no similar certainty of support to the economy. And the basic thrust of the corporate elite is to pay money to those who already have it and may not spend it....
....I didn't ever expect it, we have open social and political support for wealth and for preserving the incomes of the rich - protecting and enhancing them....and it is very clear the abruptness, the openness with which a policy for the rich is pursued in Washington, and everything from taxation to foreign policy is something I never expected. Now its the most urgent political issue there is."

blackmercedes · #7 12-18-2003, 12:28 PM

Uh, Dean, maybe you missed the "fact" that all academics are "liberal" and therefore know nothing of the "real" world? Despite the fact that John Kenneth Galbraith is acknowledged as one of the finest economic minds of all time, the conservatives find it easy to completely dismiss anything he says simply due to his political orientation and chosen profession.

He's right. Capitalism is a good thing, even those of us that lean to the left acknowledge that. It's the rules of the game and those that control the board that we watch closely. Capitalism was not intended to benefit only a small group of corporate elite that no longer have ownership or long term interests in the firm. It was to provide a strong and stable economic base for the nation's citizens, rewarding innovation and risk taking, but in the process providing sustainable prosperity and a high standard of living. Economic policy is to provide the rules of the game to ensure competition flourishes.

Under unfettered true capitalism, monopoly is the end game result, and this is not desirable. Anyone in doubt needs to examine the capitalist economies of nations like the former USSR state of Georgia.

Zeitgeist · #8 12-18-2003, 02:19 PM

I'm personally in favor of celebrating Lust, if we must choose to support one of our favorite 'deadly sins'. Greed is too icky...

Published on Thursday, December 18, 2003 by the Guardian/UK
The Unselfish Gene
Evolutionary Theory Says Self-Interest Dictates Our Behavior So Why Do We Show Such Generosity at Christmas?

by Johnjoe McFadden

What prompted Good King Wenceslas to look out on that feast of Stephen? And why should he have cared that the poor man was gathering winter fuel? Modern evolutionary theory agrees with market economics that we are inherently selfish and unlikely to give if we don't expect to receive. But new research challenges that model.

The origin of altruism goes to the heart of the gene/culture debate that was launched in 1975 with the publication of EO Wilson's Sociobiology and, a year later, Richard Dawkins's The Selfish Gene. Sociobiology claims that human nature - and by extension human society - is rooted in our genes: we are, according to Dawkins, "lumbering robots" created "body and mind" by selfish genes. This is anathema to social scientists and biologists such as Steven Rose, who see human nature as far more malleable.

Altruism is not confined to humans, but when animals give presents it is nearly always to close kin. The mathematical biologist JBS Haldane is credited with discovering the mechanism known as kin selection, when he declared that he would lay down his life for two brothers or eight cousins. Haldane's familial benevolence was based on the fact that two of his brothers or eight of his cousins would carry just about all his genes. So helping your relatives ensures that your (shared) genes live on.

Kin selection may account for pack behavior, but it fails to account for human benevolence, which is often extended well beyond the family. It is not only Blanche DuBois who can depend on the kindness of strangers. Codes of hospitality are a common feature of human societies - from the desert-dwelling Bedouin to the Arctic Inuit.

To explain non-kin-directed altruism, an assortment of gene-based mechanisms has been proposed, ranging from reciprocal altruism (you scratch my back and I'll scratch yours) to signaling theory (conspicuous kindness to attract mates). But none can fully explain human generosity. What did Good King W hope to gain from bringing flesh and wine when the frost was so cruel outside? He could hardly have expected the poor man to reciprocate. And tramping about in all that crisp and even snow was unlikely to improve his mating options.

Kindness and cooperation underpin much of human society. From the Kyoto agreement to arms controls or the state of public toilets, they all depend on individual willingness to commit resources to a common good. But no one has come up with a satisfactory evolutionary explanation of why we do it.

In a recent Nature paper, Ernst Fehr and Urs Fischbacher of the University of Zurich evaluated the evidence from a series of cunning experiments. In the ultimatum game, two subjects are asked to share a pot of money, say £100. One of them (we'll call him Steven) decides the cut - who gets what. The other (we'll call him Richard) can either accept his share or cry foul, in which case neither of them takes any of the money away.

The players play only once so there isn't an opportunity for reciprocal altruism. If Richard is behaving entirely selfishly (programmed by his selfish genes), he should accept whatever Steven is prepared to give. But generally he doesn't. If Steven donates less than £25, Richard generally refuses his share and they both leave the table empty-handed. Richard is prepared to forsake his (albeit smaller) share in order to punish Steven's selfishness.

Another experiment looks at public-good altruism. Here a group of subjects are each given a sum, say £10, which they can either keep for themselves or pay some amount - a tax - towards the public good. The taxman (we'll call him Gordon) is generous enough to double the tax revenue and give an equal share back to each member of the group, whether or not they paid into the tax kitty. It makes sense for the group to donate everything to Gordon who doubles and redistributes it. But instead of getting £20, the group members discover they only take away £12 or £15. Someone's not paying his or her share of the tax but still claiming the reward. At the next round, knowledge that some neighbors are freeloaders prompts group members to reduce the tax they are prepared to pay. The process of cooperation decay continues until nobody is prepared to pay anything.

Avoiding cooperation decay is the aim of governments and international institutions. Fehr and Fischbacher claim that the key to promote what they call strong reciprocity is rewarding generosity with kindness but punishing cheaters, even at the expense of the punisher. This is why Richard refused to accept Steven's offer, though his genes might have been telling him to take the money and run. Similarly, if public-goods experiments allow subjects to punish cheats (even if the punishment is costly for the punisher), cooperation flourishes.

Strong reciprocity promotes kindness and discourages cheats, but is it a product of our genes or in our culture? It can't be entirely genetic, since different human societies (with very similar genes) vary greatly in their tolerance of cheating. Fehr and Fischbacher argue for gene-culture co-evolution: cultural and institutional environments promote social norms that favor the selection of genes that promote cooperation.

Making strong reciprocity work at both a local level (discouraging anti-social behavior) and international level (persuading the Americans to sign the Kyoto agreement) would be beneficial to society and the world. And I for one feel much happier singing Good King Wenceslas's praises when I know he wasn't just a lumbering robot, the slave of his selfish genes.

· Johnjoe McFadden is professor of molecular genetics at the University of Surrey, and author of 'Quantum Evolution'.

kerry · #9 12-18-2003, 05:36 PM

I think there is a big difference between being in favor of capitalism and being in favor of greed. A person can denounce humanitarianism without having to praise greed. Greed as a character trait is ugly. There certainly can be capitalism without greed. In fact, the places where capitalism grew up, Scotland, England, Holland etc were deeply religious countries in the early stages of capitalism. No one at that time would have thought that greed was a desireable personality characteristic. Early businessmen were governed by rigid moral codes derived from their religion. Their world was quite different from our self-indulgent world. I may be wrong on this, but I don't believe Adam Smith was in favor of greed.
I think Galbraith is on to something. Part of the reason that capitalism succeeded was that owners and shareholders plowed profits back into the businesses. Their true reward was in heaven so earthly rewards were only temporary and secondary. With our culture emphasizing immediate satisfaction, the managerial class is no longer willing to wait for their heavenly rewards. Their control of corporate information allows them to bleed the companies dry in the interests of their own immediate satisfactions. Praising greed reinforces this tendency and provides the managerial class with justification for their ugliness.

Businesspeople don't need to be motivated by altruism but by the same token, they don't need to be motivated by greed. I think cultures that glorify greed are feeding a cancer.

Doesn't anyone read the ancient Greeks anymore? They weren't altruists, but neither were they greedy. They were motivated by a quest for excellence. It is quite different.

tabasco85331 · #10 12-18-2003, 06:52 PM

Driving big business to manufacture their products outside the U.S. is killing our economy. Encouraging companies to stay here through tax incentatives benefits everyone. I shake my head and wonder how some liberals want to keep taxes high on businesses and offer no support what-so-ever, then criticize that same company for moving elsewere because it can't make a profit here. Very, very short sighted on their part. Raising taxes encourages existing business to move, but even more hurtful, new business never even entertain the thought of manufacturing or headquarters here. Trickle down is zero, zip, nada! No jobs=no income taxes collected. No jobs=no supporting businesses(grocery stores, malls, all stores etc...) Jobs help Americans and America, our economy, tax structure, and raise the standard of living. A basic economics concept. Investment=returns, returns=investment. One can't occur without the other.

mikemover · #11 12-18-2003, 07:09 PM

Quote:

Originally posted by tabasco85331
Sounds like you're confusing,"capitalism" for "greed". The ability to develop ones ideas into a successful business venture and then make money are key principles to Americas freedoms. Capitalism "works"!

Me? Nope, not confused at all. I posted the article because so many people (meaning liberals/Dems) actually DO equate capitalism, and the desire and/or the right to keep what you earn, with greed.

To adress Z's McFadden quote....There is no such thing as a truly 100% "unselfish" act. Even when altruism is directed towards someone you are unrelated to, and unacquainted with, and there is no possibility of reward or reciprocation or advantage ever returning to you, it still makes you FEEL good about yourself. So it is technically still a "selfish" act.

Mike

tabasco85331 · #12 12-18-2003, 07:28 PM

Making alot of money off a great idea, and taking the risk to reinvest in the further development, thus making more money is not "greedy" it's what smart people do. Bill Gates is a genius and deserves to be rich! I agree with you!

blackmercedes · #13 12-18-2003, 07:53 PM

Quote:

Originally posted by tabasco85331
Raising taxes encourages existing business to move, but even more hurtful, new business never even entertain the thought of manufacturing or headquarters here.

Canada dropped it's corporate tax rate to nearly zero and it did nothing to keep business here. It just meant they had one less lame excuse when leaving.

It's lack of investment in the very market that keeps them in heavy-duty profits. Canadian firms don't want to pay the "high" wages that we require to enable us to consume all the goods they make. Sometime, this might catch up with them...

(it did in 1929, 1958, 1982 and 1991...)

jpb5151 · #14 12-18-2003, 08:02 PM

Quote:

Originally posted by tabasco85331
Bill Gates is a genius and deserves to be rich!

He took hundreds of dollars from me and left me with shoddy software that I could never rely on. There've got to be better examples.

Kuan · #15 12-18-2003, 08:13 PM

This Ayn Rand stuff is so boring. All emotion, no substance. Call it whatever you want, but it's well known that for every event x there exists a sufficient condition y which implies x. Rand called this economic force selfishness and labeled it as a virtue.